Banks and alternative lenders typically charge an origination or closing fee that should be considered along with the interest rate. Some companies don’t charge a fee but bundle it into the loan rate. Even Kickstarter charges a 5% fee to successful campaigns, but it’s all DIY for campaign creators.
NextSeed does not charge any fees until you successfully raise funds.
Prior to launch, you may incur some third-party fees:
- $500 to open an escrow account at the bank
- Media to showcase your business, like photos, renderings or videos (most businesses already have their own media)
- If you’re raising funds under Regulation Crowdfunding, reviewed financials from a Certified Public Accountant may be required if you are raising over $107,000
- It’s also good practice for you to have a lawyer advise you and help review your documents in any business transactions
You won’t be charged extra for these setup services from NextSeed:
- Standardized legal templates
- Structuring the terms of your offering
- Active advice on preparing your campaign page
- Marketing consultation in preparing your campaign push
- Assistance with forms filed with the SEC
That should help you save on crowdfunding advisor fees, marketing agency fees, and it should reduce the legal workload.
During the campaign, you may incur you own costs promoting your offering, such as:
- Social media ads or other ads
- Holding events to showcase your space
To support your efforts, NextSeed will be leveraging its network to announce your offering and drive traffic to the website.
Only upon the successful closing of your campaign will NextSeed receive a fee of 5-12% of your total raise:
- For investments made by people you bring through your unique referral link, the fee will be 5%.
- For investments made by NextSeed members, the fee will range from 7-12%. The percentage decreases for higher raise amounts, and repeat issuers also receive fee discounts.
After a successful campaign, NextSeed provides continuing services:
- Ongoing investor management and communication
- Payment management and distribution to all investors
- Annual investor tax forms
- Preparing you annual report for filing
- Other administrative functions throughout the duration of the loan (years!)
Again, all of these services at no extra charge.